Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?

This paper is concerned with the empirical relationship between biodiversity conservation values and income. We use random effects panel models to examine the effects of income, and then GDP per capita, on willingness to pay for habitat and biodiversity conservation. In a meta-analysis, 145 Willingness To Pay estimates for biodiversity conservation where existence value plays a major role were collected from 46 contingent valuation studies across six continents. Other effects included in the meta-analysis were the study year; habitat type; continent; scope as presented to respondents; whether WTP bids were for preventing a deterioration or gaining an improvement in conservation, whether a specific species or specific habitat was protected; whether the questionnaire used a dichotomous choice or an open-ended format; distribution format; and the choice of payment vehicle. GDP per capita seemed to perform as well as an explanatory variable as respondent’s mean stated income, indicating that it is wealth in society as a whole which determines variations in WTP. Even if large variation, our main conclusion is, that the demand for biodiversity conservation rises with a nation’s wealth, but the income elasticity of willingness to pay is less than one.     

Asking for Individual or Household Willingness to Pay for Environmental Goods?

The aggregate welfare measure for a change in the provision of a public good derived from a contingent valuation (CV) survey will be higher if the same elicited mean willingness to pay (WTP) is added up over individuals rather than households. A trivial fact, however, once respondents are part of multi-person households, it becomes almost impossible to elicit an “uncontaminated” WTP measure that with some degree of confidence can be aggregated over one or the other response unit. The literature is mostly silent about which response unit to use in WTP questions, and in some CV studies it is even unclear which type has actually been applied. We test for differences between individual and household WTP in a novel, web-administered, split-sample CV survey asking WTP for preserving biodiversity in old-growth forests in Norway. Two samples are asked both types of questions, but in reverse order, followed by a question with an item battery trying to reveal why WTP may differ. We find in a test between samples that the WTP respondents state on behalf of their households is not significantly different from their individual WTP. However, within the same sample, household WTP is significantly higher than individual WTP; in particular if respondents are asked to state individual before household WTP. Our results suggest that using individual WTP as the response unit may overestimate aggregate WTP. Thus, the choice of response format needs to be explicitly and carefully addressed in CV questionnaire design and further research in order to avoid the risk of unprofitable projects passing the benefit-cost test.

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Households’ Willingness to Pay for Water Service Attributes

Water consumption and disposal are often taken for granted as essential services with required levels of service quality, yet little is known about how much consumers are willing to pay for specific service levels. As customers in many countries face changing levels of water availability (especially shortages linked possibly to climate change and limited catchment capacity), the need to assess the value (and hence benefit) to society of varying service levels and prices in an effort to secure the provision of and disposal of water has risen on public agendas. In an attempt to establish how much customers are willing to pay for specific levels of service, we use a series of stated choice experiments and mixed logit models to establish the willingness to pay to avoid interruptions in water service and overflows of wastewater, differentiated by the frequency, timing and duration of these events. The empirical evidence is an important input into the regulatory process for establishing service levels and tariffs, as well as useful planning information for agencies charged with finding cost effective ways of delivering services at prices that customers deem to be value for money.     

Do Colored Photographs Affect Willingness to Pay Responses for Endangered Species Conservation?

The NOAA panel suggested that use of photographs should be pre-tested to explore their effects on subjects (Arrow et al. 1993). For this paper, a modification to the test suggested by the NOAA Panel was made. We tested whether use of colored, as opposed to black and white (B & W), photographs influence respondents’ valuation of the environmental commodity in question. The context of the test is a CVM study valuing the benefits from protecting the national bird. This was performed using two drop-off surveys that were identical except for the color of the photographs incorporated in the survey instrument. The dichotomous choice logit equations were statistically different between the two treatments of the questionnaire, indicating the significant effect of colored photographs on the respondents’ WTP. The findings support the NOAA Panel recommendation of careful pre-testing and scrutiny of the photographs integrated in the questionnaire since ‘packaging’ of the environmental good (i.e., endangered species protection) matters in valuing benefits associated with it. Since colored photographs are found to be value-enhancing, to simply use B & W photos as an attempt to reduce cost associated with implementing the contingent valuation (CV) survey, especially when limited research money is involved, would result to lower the estimated value of the environmental good.     

Estimating the Economic Value of Statistical Life in China： A Study of the Willingness to Pay for Cancer Prevention

This paper reports the results of a Contingent Valuation （CV） study on cancer prevention where Multiple-Bounded Dichotomous Choice （MBDC） questions are asked of rural residents in China about their willingness to pay （WTP） for a hypothetical cancer vaccine which is expected to be effective for one year. The WTP data are analyzed with region-, age- and gender-specific cancer morbidity and mortality risk statistics; an upper and lower bound of the Value of a Statistical Life （VSL） are then estimated. The estimated VSL is between 481 and 814 thousand yuan （or 58 and 98 thousand US dollars） at 2000 constant prices, which is compatible with the results of previous studies.     

The Economics of the Greenium: How Much is the World Willing to Pay to Save the Earth?

Environmental and Resource Economics - Sadly, not much. This paper provides a theoretical and empirical analysis of the greenium, the price premium the investor pays for green bonds over...     

Willingness to pay for publicly-financed health care: how should we use the numbers?

This paper addresses the question of how willingness to pay (WTP) values in health care evaluation can be used by policy makers. The way in which WTP values are used depends on from whom values are elicited and whether the good concerned is privately-financed or publicly-financed through taxation. Thus, four possible uses of WTP values are identified. The focus is on the two uses which arise in the publiclyfinanced situation. ‘Conventional’ use of WTP values, where the decision as to whether or not to provide a service depends upon whether or not WTP values are greater than total cost, applies only in the privately-financed, and not publiclyfinanced situations. The situations with publicly-financed goods are more complex. The use of WTP values for publicly-financed goods is justified and illustrated.     

What is the Best Distribution for Pollution Abatement Efforts? Information for Optimizing the WFD Programs of Measures

The Water Framework Directive (WFD) has mobilized economic theory in order to encourage E.U. Member States to reach desirable environmental water pollution levels by conciliating economic and ecological interests. For this purpose, a stringent standard (“good status”) has been set. Nevertheless, it will be possible to relax this standard if it appears that total abatement costs required for reaching this “good status” exceed expected environmental benefits. This ambitious policy updates the issue of the abatement costs and environmental benefits assessment. Concerning the costs, a full discrimination of the abatement effort minimizes the total cost when the impact of polluters changes spatially, while a uniform effort can reach a pollution target in flexible ways. In this case, the increase of the degree of discrimination of the abatement effort is required only if it generates significant positive economies. Our theoretical and empirical results have shown that the discrimination advantage becomes insignificant for either very demanding or very little demanding ecological standards and varies according to the polluters’ profile. In the case of “intermediate” standards, efficiency gains become negligible with a restricted number of effort “levels”.     

Which Elasticity? Estimating the Responsiveness of Taxpayer Reporting Decisions

In this paper we present estimates of the responses of individuals to marginal tax rates in their reporting of income, using data from individual tax returns for the year 1995. One estimation method is ordinary least squares regression. A second method uses quantile regression, which provides evidence on behavioral responses at different points (or quantiles) in the distribution of income and so is relevant to the question of whether the responses of, say, the rich differ from those at other points in the income distribution. Our results clearly indicate that marginal tax rates affect the reporting decisions of individuals. However, there are significant differences in the marginal tax rate reporting responses for the various types of reported income, there are major differences across income classes, and there are notable differences in the estimated responses across estimation methods.

Households＇ Cognition and Willingness to Pay for Village Public Spaces——A Case Study of Shuanggou Village,Henan Province

通过对河南省双沟村75家农户的深入访谈,运用Logistic二元选择模型对影响农户公共空间的支付意愿进行分析。结果表明,所有农户都认为公共空间受到不同程度的破坏,大多数农户认为无论是破坏还是改善都存在政府不作为。农户对公共空间的支付意愿受个体特征、农户特征和认知特征的共同制约,支付意愿普遍较低。年龄和学历与支付意愿负相关;职业与之呈显著正相关;农户家庭农业收入和非农收入与之具有统计上的正相关,但系数较小,实际意义并不明显;农户认为公共空间破坏越严重,越易产生支付意愿。农户对村域公共空间的认知及其支付意愿对村域治理有重要的政策含义,社会主义新农村建设应重视公共空间在村庄的稳定和发展中的作用。     

Is the response of the bank of England to exchange rate movements frequency-dependent?

In this paper, we estimate a Small Open Economy Dynamic Stochastic General Equilibrium (SOEDSGE) model of the United Kingdom (UK), with the main focus being to test the hypothesis whether the Bank of England (BoE) responds to (frequency-dependent) exchange rate movements or not. For our purpose, we use an extended quarterly data set spanning the period of 1986:Q2 to 2018:Q1, which in turn includes the zero lower bound situation, and also estimate the SOEDSGE model based on observable data decomposed into its frequency components. We find that the BoE not only responds to exchange rate movements in a statistically significant manner, but also that it primarily focuses on long-term movements of currency depreciations more strongly than short-term fluctuations of the same. In general, our results are also confirmed for three other developed inflation-targeters namely, Australia, Canada and New Zealand.     

Which Firms are More Sensitive to Public Disclosure Schemes for Pollution Control? Evidence from Indonesia’s PROPER Program

This paper analyzes differences in firms’ responsiveness to PROPER, Indonesia’s public disclosure program for industrial pollution control. The overall effectiveness of this program at achieving emissions reductions and its low regulatory costs have earned it a good reputation around the world. PROPER had no deterrents or incentives other than those that arose indirectly from publicly disclosing information about the environmental performances of firms. We analyzed plant-level data to relate short- and longer-term environmental responses to facility characteristics. The results revealed that foreign-owned firms were consistently more likely to respond to the environmental rating scheme, compared to private domestic firms. This is a clear and important insight with consequences for a number of issues, such as understanding the pollution haven debate. Also, firms located in densely populated regions, particularly in Java, responded more positively to the public disclosure of PROPER ratings. The main observed effect was however given by the initial level of environmental performance of firms. Those firms that had bad environmental performance records felt pressure to improve, but if the initial abatement steps had already been taken, the incentives to improve further appeared to diminish.     

Is the price of gold to gold mining stocks asymmetric?

If an asymmetric relation exists between the prices of gold and gold mining stocks, then these firms possess real option characteristics, and therefore, a premium should be added to their valuation. This article examines this proposition, by firstly, using quantile regressions, which are ideally suited to examine asymmetries, and secondly, by accounting for endogenously determined structural breaks in the data. Our findings provide no support for an asymmetric relation. Furthermore, we also show that out-of-sample forecasting shows there is no causality from the gold price to the prices of those gold mining shares used in the sample.